VANCOUVER – Non-Canadians are purchasing so many common shares of Telus that the company is in danger of violating Canada’s foreign ownership restrictions.
The telco issued a notice Thursday reminding non-Canadian investors of its reservation procedures while warning that that its transfer agent may not be able to approve all pending or new applications. Non-Canadians wanting to buy Telus’ common shares must reserve the right to obtain transfers by contacting the company’s transfer agent, Computershare Trust Company of Canada, and obtaining a reservation number after completing a reservation application.
Telus said that the catalyst for this announcement is “significant buying interest” by non-Canadian investment firms presumed to have “short-term, event-driven trading tactics” related to Telus’ proposal in February to convert non-voting shares into common shares. While noting that the result is little to no real net economic interest in Telus, the company said that “the sole purpose appears to be to exert influence over the proposed share conversion and to increase the share trading spread for near term profit”.
"We have had overwhelming unsolicited indications of support from long-term holders of both classes of shares for the many benefits of the share conversion proposal and the good corporate governance of extending voting to all our shareholders in a manner that is consistent with the intent and unique heritage specific to the respective rights of the Telus common and non-voting dual-class share structure," said EVP and CFO Robert McFarlane, in the statement.
Under the Telecommunications Act and other related statutes, non-Canadian ownership of voting shares of Telus is limited to 33S% of the outstanding voting shares. Telus said that since 2004, the level of non-Canadian ownership of common shares has been generally below 20%, but that level reached approximately 24% this week. This level increases beyond the 33S% restrictions when approved and pending reservation applications by non-Canadians are taken in to account.
